Not all securities can be purchased on margin. NASDAQ and all listed securities are allowed, as are U.S. government and municipal bonds. OTC securities are allowed if they are listed on the Federal Reserve marginable securities list.
However, new issues have to be publicly traded at least 30 days before they can be purchased on margin. Mutual fund shares are not eligible for trading on margin, nor are put or call options. The premiums of puts and calls must be paid in full; though, they must be recorded within a margin account.
Summary
Marginable and Non-Marginable Securities
Marginable securities: securities that can be purchased on margin
• Exchange-listed securities (including NASDAQ and NYSE securities)
• U.S. government securities
• Investment-grade bonds and debentures
• OTC securities that are listed on the Federal Reserve marginable securities list
